Demystifying AI: Why You Need It at the Hyperlocal Level

Artificial intelligence may be enjoying a shift from a niche technology to its current position as the digital marketing zeitgeist, but putting it into practice can still seem like a daunting proposition for retailers. Even Elon Musk, whose current scope of operations includes creating autonomous vehicles and mastering and monetizing space flight, has expressed some reservations about AI.

It’s natural for human beings to mistrust what we don’t understand. Because the decision processes of AI often involve complex algorithms, we’re not sure whether the results of those decisions will have the outcome we want. The reality, however, is that properly programmed AI has the capacity to process more data than a team of hundreds of humans working around the clock could ever hope to achieve.

AI in a Hyperlocal Context

AI is particularly useful in hyperlocal contexts, where customers search for products or services nearby. According to STAT Search Analytics, searches that are both mobile and local have increased 34X since 2011. Forrester reported an expected 300 percent increase in investments in AI in 2017 alone as companies sought to maximize their conversion rates and improve efficiency.

Perhaps even more compelling is the opportunity for retailers given the fact that 50 percent of consumers who conduct a local search end up in store on the very same day. It’s obvious that local search has a high conversion potential for retailers, but you may be wondering where AI fits into this equation.

1. Lead Generation

The data AI is capable of processing will help reduce the hefty payroll costs typically associated with combing through vast amounts of information in search of promising leads. At the same time, the leads that AI does discover are likely to be more viable. Beyond providing consistency (it takes somewhere in the neighborhood of seven interactions with a customer to produce a lead), AI will help take consumers from recognizing their problem to visiting a website or brick-and-mortar store to (hopefully) making a purchase much faster.

2. Personalization

At the end of the day, marketing is still about getting the right message in front of the right customer at the right time. AI doesn’t change that, but it can streamline the process and allow you to influence consumers as they transition from consideration to evaluation to, finally, purchase, more efficiently. Tracking how customers interact with your brand and reaching out to them on those channels will allow AI to start a conversation with customers that you can take control of once their interested is piqued.

3. Curation

You’ve probably been enjoying the fruits of AI curation without even realizing it. Would you rather sift through the entire Netflix library when you want something to watch, or do you prefer to browse the recommended titles? Those offerings aren’t the same for every user — they’ve been selected just for you based on the shows and movies you’ve indicated you enjoy. The same applies to retail consumers, who will be surprised and delighted to see that you've curated a selection of products based on their past behaviors.

4. Customization

Curation is one thing, but AI also has the capacity to customize experiences to optimize conversion rates and customer satisfaction — and these custom experiences go way beyond a personalized email. If target consumers are walking near your brick-and-mortar store, for instance, you can shoot them a notification via your app, prompting them to stop by the store for a great deal on an item they previously viewed.

With the computational power afforded by AI analysis, companies can deliver entire websites that are personalized for an individual based on location, device, demographic, and hundreds of other data points. A report from Evergage found that 63 percent of marketers who delivered personalized website content reported increased conversion rates, while 61 percent mentioned improvements in customer experience.

AI is opening up a whole new world to marketers, and companies that choose to ignore this new tool will inevitably be left behind. If you’ve held out on investigating AI’s potential because you weren’t sure what it could do, you might want to change your approach. The real question is: What can’t AI do? From helping retailers do everything from price products to create content and personalized customer experiences, AI's going to become an increasingly integral part of sales, marketing, and everything in between.

Sadie Schabdach is the Vice President of Digital, Data Analytics and Creative Innovation at Mitchell Communications in Fayetteville.

Day to day, Sadie oversees the creative and production teams focused on delivering best in class solutions for clients across the country, in collaboration with the entire Dentsu-Aegis Network.